Point of Sale (POS) systems
By Sal Balistreri (via Foodservice.com)
Before
You Begin…
This series of articles has three primary goals: to define Point of Sale (POS)
systems, discuss their benefits, and help restaurant owners and foodservice
professionals choose the right POS system for their restaurant. In doing so, it
will describe what a quality POS system should deliver, the short and long term
benefits of installing a proper system, and why an appropriate system will pay
for itself in a very short time. Choosing a POS system that is not well to a
particular restaurant can be a costly mistake, so the article looks closely at
the different attributes that should be considered when investing in a system.
What is Point of Sale
(POS)?
Point of Sale is equipment (hardware) and a computer program (software) that
will allow servers in your restaurant to enter food and drink orders as soon as
the customer gives the order to the server. Once the item is placed in the
system, any modifiers to that item (rare, medium are, well-done) can be
attached to that item. These modifiers can be either required (rare,
medium-rare, well-done) or optional (extra sauce, no onions). In some systems,
the item can display the food components of the menu item and/or suggest a wine
that would go with that dish.
How does a POS system
work?
The customer order is sent through a cable to printers that can be located
throughout the restaurant (bar, kitchen, specific prep areas). Since all the
food and beverage orders must be printed before they are prepared, control over
the order process is implemented. Adding manager control over voids or any
deletions then assures the restaurant owner that all that food will not be
prepared unless it is on a guest check.
Menu items can be added to the check anytime. Checks can be transferred between
bartenders and servers anytime. Different menus (lunch, dinner, happy hour) can
be activated automatically at any time of the day of any day of the week.
Checks can be split between customers easily and efficiently. Even menu items
can be split among customers (bottles of wine, pizza).
When a server has completed the ordering for a table, a guest check can be
printed and presented to the customer. Guest check messages advertising
specials or upcoming events can be placed on the check and customized at will.
After presentation of the check to the customer, promotions, discounts or comps
can be effected. A good POS system can allow certain discounts, and require
manager control over others. The check can then be presented and payment
collected.
The server will process the payment at the terminal. Charge card, cash, and
check can be processed separately and reports generated by payment type when
needed.
This is just a general
overview of what takes place during a POS transaction. POS as we have stated, a combination of equipment and software that can
automate all types of transactions in your restaurant, making it more
profitable.
Lets' now loom at some of the most significant benefits afforded by a POS
system:
Speed
of Service
As soon as a server places an order, it is automatically routed to the proper
printer, and preparation can begin immediately. No longer will the server have
to wait around the bar for their drink orders. The customer gets served in half
the time as with manual systems. With some systems, the drink order can be sent
to the bar immediately while the server is still entering the food portion of
the order. In short, servers will never have to walk into the kitchen or bar to
place orders. The chefs especially love this feature. Remember, the faster your
customer is served, the faster that table can be turned over to new customers.
The software can even generate a table turn report by section and time of day.
Not all systems provide this valuable tool, so choose carefully!
Accuracy of Orders
When the server places an order, it is transmitted to the kitchen or bar, and
printed on a paper tape that is bold printed and easy for bartenders and food
prep personnel to read. No more hard to read
handwriting, no more forgotten modifiers (give away items). No more angry chefs
who cannot read an order. If a mistake is made, the hard copy is available for
the manager to find out when the order was sent to the kitchen, what time, and
by whom. It will also define each item with modifiers in bold red print.
Security of Cash Handling
A good POS system will never be out of balance. Any food and beverage items
cannot be prepared unless it is on the guest check. Once it is on the check,
the server is responsible for collecting those items. "Server
banking" is a method of controlling cash so that the server is responsible
for his or her own sales. This method has its own pros and cons, and should
therefore be carefully discussed with a consultant prior to being adopted. The
most significant pro is that your restaurant will never be short.
Discount Control
Promotions, complimentary items, and employee meals can all be handled with
absolute accuracy, and placed under manager control.
Ease of Training
In the restaurant business, employee turnover is higher than in any other
industry, and training new employees can be an on-going problem. A quality POS
system with icons and product logos can assist in training new employees into
experienced operators in as little as 10-20 minutes. If they can read, and
point at the appropriate item on the screen, they can run the system. Again,
you must ask for a program with icons.
Theft Reduction
Probably the biggest problem facing restaurants today
is employee theft. Controlling this problem can significantly add to the
restaurant's bottom line. According to Nation's Restaurant News, " Upto 30% of all restaurants
fail because of employee theft". It also states "almost one out of
every two employees will steal from their employer if given the chance".
Server Control
Which of your servers is making the most money and
profit for you? With your current system, do you have any way of tracking the
$$? Not just as sales figures, but to assess who sells the most profitable
items….who is selling the most desserts …..the most
appetizers? Who in your restaurant should be rewarded? With certain systems,
this information can be generated in a very short period of time.
Increased Sales
How can POS increase your sales? By rewarding servers
for good performance! A simple sales contest can increase sales over 200% on
popular items or groups of items. Tracking the contest is easy and automatic
with quality software. One of our customers reports a 400% increase in dessert
sales when a contest is run. With a great POS system, turning your servers into
salespeople is easy.
Intrigued by POS systems can do for you? This is just the first installment, so
stay tuned for more…
Last week, we discussed some of the most important
benefits of POS systems: speed of service, accuracy of orders, security of cash
handling, control over discounts and promotions, ease of training new
employees, theft reduction, and control over servers. Today, we will continue
that discussion by discussing the following benefits:
Sales Reporting
Extensive reporting is essential with any good POS system. The ability to
customize those reports is even more important. The following sales related
reports will let you make better business decisions about menu items, servers,
and sales: restaurant sales reports, item sales reports, server sales reports,
payments reports, void reports, time and attendance reports, profitability
reports, and table turn reports.
A well defined and established POS system will let you generate these reports
by day, week, month and/or year in the past, or over
any range you think might assist you in making better decisions.
Custom Reporting
A good POS system's reports can always offer you some form of customization to
ensure that you generate the type of information that is particularly useful to
the decision-making process of your establishment.
Menu Item Performance
What items on your menu are the most profitable, the
biggest sellers? What is your daily profit by individual item? How much of an
item are you selling in relationship to the main category, i.e., how much of
your meat sales are in the form of steak in units, dollars and percentages?
Food and Beverage Usage
How many shots of Johnny Walker Black did I sell last
week? Last Month? Last Year? How many 8 oz. Filet Mignon? How many did we buy?
How many are left in the cooler?
Credit Card Reporting
A feature you wouldn't want to be without! A well-defined POS system can charge
the server for the amount it costs you to process the tips on a credit card
sale! This can add up to thousands of dollars in a year's time. All of this can
go right back in your pocket!
If you are like most restaurateurs, these are probably a few of the many things
you would like to, but cannot accomplish because of constraints in terms of
time and information.
Now that we are well into our discussion of the benefits afforded by a good POS
system, the time is right to help you understand what red flags are an indication of a definite need for a more
sophisticated control system. In a market where operators are facing the
dilemma of downward pressure on margins, less than excellent service and
business acumen can be very dangerous. So, be sure to check for the following,
and take action today!!
Be sure
to continue on to the next segment to find out more about POS savings, etc. See
you again soon - learn more when you read on!
Welcome
back! We've discussed the extensive benefits of POS systems, so now let's see
how these benefits translate into real dollar savings. According to information
published by the National Restaurant Association, restaurants can expect to see
the following savings per year. The figures are based on national averages, and
reflect POS savings for a restaurant doing $1,000,000 in sales per year.
Preset and standard pricing, coupon/discount control, and guest check-addition
change calculation:
Speed of
service and increased table turns:
Increased
sales, suggestive selling, and sales contest:
Processing
fees, credit card tip reduction:
Total
Savings: $26,800 per year
The
above calculation does not take theft prevention, streamlining of kitchen and
bar orders, control of prepared items or increased accuracy of sales data into
account, so in reality, expect to save much much
more!
TYPES OF SYSTEMS
All POS systems belong to two distinct types: Proprietary and Non-Proprietary.
The differences are as follows:
Proprietary Systems
Generally constitute parts from a single manufacturer. Micros and Remanco are examples of proprietary systems. These systems
for the most part, use only hardware (printer, touch screen, etc.) made by that
company. For example, if you buy a Micros system and want to connect an
additional printer to the system, the only printer that you can use is one made
by Micros (with their special chip - subject to change). Typically, proprietary
hardware is more expensive, limited in availability, and service on these
products mostly comes from the dealer who installed the product, no matter what
they charge.
Non-proprietary Systems
These are also known as open systems. They can be
fitted with "off the shelf" hardware made by various manufacturers,
with a standard PC based computer as the platform. This open architecture idea
easily lends itself to the ability to customize the perfect system for each
restaurant, and therefore should be a key determinant in the decision to go
with a particular POS vendor.
Windows or Dos?
Believe it or not, there are still vendors for DOS based POS systems! Since the
world has clearly chosen the path of windows, with its superior user
friendliness, a DOS system is not advisable. Why? In addition to the fact that
Windows is easier to use, it also allows you to perform many jobs
simultaneously. While the computer is running your POS system, you can type a
new menu and daily specials, pay your bills, or write a letter.... …all at the
same time.
HOW TO CHOOSE THE RIGHT ONE
So far, it seems to make sense for most restaurant owners to consider a
non-proprietary system with a software package specifically designed for the
windows environment. When deciding on a software package, restaurant owners
should be sure to get answers to the following questions regarding the company
producing the software:
This
closes our discussion for today, but stay tuned for more on POS…Next week,
choosing the dealer, means of payment, and more!
I hope
you now have all the right tools to choose a POS system that works for you!
Let's continue on to discuss two more important aspects of the POS
decision-making process, i.e., choosing the right dealer/distributor, and
paying for your system.
EVALUATING A DEALER
A dealer who has extensive experience in the
restaurant business would be a great resource in terms of equipping you and your
employees with the knowledge and tools to resolve common issues. Most
importantly, this type of professional will be always available after the sale
is completed.
You must ask a dealer/distributor these questions before considering giving
them your business:
PAYING FOR IT ALL.
You've
seen what POS can do for you…you agree that it is the right thing to do….you
realize that the controls are necessary to maximize your profits…..but, . the pressing question is: How
do you pay for it all? Most dealers offer leasing programs that can be tailored
to fit the individual needs of the restaurateur. There is no doubt that the
right dealer will work with you to fund the system that works for you!
Remember, these are the features you should not live without:
This brings our four-part series to an end. If you want to put POS to work for you, and make more money right now, call us, and ask a hospitality consultant to answer your most pressing questions.